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FDI retail choice left to states.

WHILE opposition parties attacked the government on Monday over foreign direct investment ( FDI) in multi- brand retail, commerce and industry minister Anand Sharma's letters to several chief ministers ( CMs) make it clear that the choice of implementing the decision was left entirely to the state governments.

Sharma's letters to CMs such as Prakash Singh Badal of Pubjab and Nitish Kumar of Bihar clearly states, " In my view, India being a union of states, the right of those states which find merit in this policy must be respected while acknowledging the prerogative of those states who have reservations." Interestingly, while Badal had earlier favoured multinational companies entering the retail sector in order to ensure better prices for farm produce changed his stand because his ally, the Bharatiya Janata Party, was opposed to the move. His critics have viewed this as a compromise as Punjab's economy is essentially an agricultural one and Badal positions himself as a farm leader.

Sharma's letter also makes attempt to allay fears over multinational companies resorting to predatory pricing to drive away small retail. The letter highlights the fact that the " Competition Commission has been established by law to ensure that such practices receive greater scrutiny". However, responses to these letters sent to the commerce ministry by state governments show a clear political divide with the Congress- ruled states favouring FDI in multi- brand retail on the ground that it will ensure better prices for farmers and consumers alike since middlemen will be phased out.

Sharma's letters to CMs clarifies govt stance

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Publication:Mail Today (New Delhi, India)
Date:Nov 27, 2012
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